Commodity Trading Tips for Natural Gas by Kedia Commodity

Ajay Kumar Kedia 28 August 2013

Naturalgas settled up 3.76% at 239.90 as support seen as rupee hit a record low and posted its biggest percentage fall in 18 years after parliament's approval of a $20 billion Food bill ahead of elections due next year. Natural gas prices edged higher despite of news that weather forecasting models eased up on calls for above-normal temperatures running through early September, which allowed for profit taking. Updated weather forecasting models pointed to seasonal temperatures hovering over a good portion of the heavily populated eastern US through September 10. Earlier forecasts called for above-normal temperatures, which sparked rallies in previous sessions though forecasts for moderate mercury readings allowed for profit taking on Tuesday. Demand for natural gas tends to rise at the country's thermal power plants amid heat waves, as homes and businesses throttle up their air conditioners. Contract expiration often leads to volatile sessions as market participants look to close out positions or reposition their portfolios. Meanwhile, US supply levels also remained in focus. Total US natural gas storage stood at 3.063 trillion cubic feet as of last week, 1.5% above the five-year average but still 7.2% below last year's level. Early injection estimates for this week's storage data range from 53bcf to 69bcf, compared to a 64bcf increase during the same week a year earlier. The five-year average for the week is a build of 66bcf. Technically market is under fresh buying as market has witnessed gain in open interest by 15.56% to settled at 5903 while prices up 8.7 rupee, now Natural gas is getting support at 234.6 and below same could see a test of 229.3 level, And resistance is now likely to be seen at 242.9, a move above could see prices testing 245.9.